AFRICAN DEVELOPMENT BANK GROUP

PROJECT: INSTITUTIONAL SUPPORT TO PUBLIC FINANCE MANAGEMENT

AND AID COORDINATION (PFAID)

COUNTRY: REPUBLIC OF SOUTH SUDAN

PROJECT APPRAISAL

REPORT

December 2012

OSFU UNIT

Appraisal Team

Head Unit: Mr. J. WAHOME, OIC, OSFU

Regional Director: Mr. S. KONE, OIC, OREB

Team Leader: Mr. J. WAHOME, OIC, OSFU

TABLE OF CONTENTS

Acronyms and Abbreviations, Currency Equivalents, Fiscal Year, Weights and Measures,

Client’s Information, Project Summary, Results-based Logical Framework Project Timeframe

I – STRATEGIC THRUST AND RATIONALE

1.1 The proposed

1.2 Project linkages with country strategy and objectives

1.3 Project Linkages with Aid Strategy of South Sudan

1.4 Rationale for Bank’s involvement

1.5 Institutional Arrangement and Donor Intervention in PFM

II – PROJECT DESCRIPTION

2.1 Project components

2.2 Technical solution retained and other alternatives explored

2.3 Project type

2.4 Project cost and financing arrangements

2.5 Project’s target area and Beneficiaries

2.6 Participatory process for project identification, design and implementation

2.7 Bank Group experience and lessons reflected in project design

2.8 Key performance indicators

III – PROJECT FEASIBILITY

3.1 Economic and financial performance

3.2 Environmental and Social impacts

IV – IMPLEMENTATION

4.1 Implementation arrangements

4.2 Monitoring

4.3 Governance

4.4 Sustainability

4.5 Risk management

4.6 Knowledge building

V – LEGAL INSTRUMENTS AND AUTHORITY

5.1 Legal instrument

5.2 Conditions associated with Bank’s intervention

5.3 Compliance with Bank Policies

VI – RECOMMENDATION

Tables

Table 2:1 Project components

Table 2.2: Project Cost Estimates by Component

Table 2.3: Sources of Financing

Table 2.4: Project Cost by Category of Expenditure

Table 2.5: Expenditure Schedule by major

Table 2.6: Expenditure by years

Table 4.1: Procurement arrangements

Table 4.2: Project Implementation Schedule

Annexes

Annex 1: Map of South Sudan

Annex 2: Comparative Socio Economic Indicators

Annex 3: Donor Interventions

Annex 4: Bank Support to Sudan and South Sudan

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i

ACRONYMS AND ABREVIATIONS

ACMU Aid Coordination and Management Unit, MoFEP

ACCA Association of Chartered Certified Accountants

ADB African Development Bank

ADF African Development Fund

ASYCUDA Automated System of Customs Data

AUHIP African Union High Level Implementation Panel

CBTF Capacity Building Trust Fund

CPA Comprehensive Peace Agreement

DFID/UK Department for Foreign and International Development (U.K.)

DRC Democratic Republic of Congo

EA Executing Agency

FSF Fragile States Facility

GoNU Government of National Unity

GPN General Procurement Notice

GRSS Government of the Republic of South Sudan

ICBPRGGP Institutional Capacity Building for Poverty Reduction and Good

Governance

ICT Information and Communication Technology

IMF International Monetary Fund

ISP Institutional Support Project

JDT Joint Donor Team

MDTF Multi Donor Trust Fund

MoHRD Ministry of Human Resource Development

MoFEP Ministry of Finance and Economic Planning

MTCDS Medium Term Capacity Development Strategy

NCP National Congress Party

NDP National Development Plan

N-JAM National Joint Assessment Mission

OAG Office of the Auditor General

OSFU Fragile States Unit

PC Project Coordinator

PCR Project Completion Report

PEFA Public Expenditure and Financial Accountability

PFAID South Sudan: Institutional Support to Public Finance

Management & Aid Coordination

PFM Public Financial Management

PIU Project Implementation Unit

PSC Project Steering Committee

SDR Special Drawing Rights

SPLA Sudan people’s Liberation Army

SS South Sudan

SSAS South Sudan Aid Strategy

SSCCSE South Sudan Center for Census, Statistics and Evaluation

SSDP South Sudan Development Plan

UA Units of Account

UNDP United Nations Development Program

UNICEF United Nations International Children’s Emergency Fund

USAID United States Agency for International Development

ii

Currency Equivalents: As at December 2011

South Sudan Currency Unit: South Sudanese Pound

1 Unit of Account (UA) = 1 Special Drawing Rights (SDR)

1 Unit of Account (UA) = 1.58212 US Dollar

1 Unit of Account (UA) = 1.18654 Euro

1 Unit of Account (UA) = 0.992989 GBP

1 Unit of Account (UA) = 4.18030 South Sudan Pound (SSP)

1 South Sudan Pound (SDP) = 1 Sudan (Khartoum) Pound

GOVERNMENT FINANCIAL YEAR

July 1 – June 30

Weights and Measures

1 metric tonne = 2204 Pounds (lbs)

1 Kilogramme (kg) = 2.200 lbs

1 meter (m) = 3.28 feet (ft)

1 millimeter (mm) = 0.03937 inch (“)

1 kilometer (km) = 0.62 mile

1 hectare (ha) = 2.471 acres

iii

Client’s information

BENEFICIARY: Republic of South Sudan

EXECUTING AGENCY: Ministry of Finance and Economic Planning (MoFEP)

Financing plan

Source Amount (UA) Instrument

ADF/FSF

4.80 million

Grant

Timeframe - Main Milestones (expected)

Preparation

July 2011

Appraisal July 2011

Project approval December 2012

Effectiveness January 2013

Mid-term Review December 2013

Last Disbursement December 2014

Project Completion and Audit February 2015

iv

Project Summary

Paragraph Topics covered

Project

Overview

Program name: Institutional Support Project to Public Finance Management and Aid Coordination

(PFAID).

Geographic scope: Entire country

Expected Outputs: The project will contribute to: i) building state capacity and accountability in

PFM at the Central Government (GRSS), the State Governments and Counties; and ii)

improving aid coordination in support of the country’s PFM systems. Consistent with the

agreements reached with the GRSS, the operation will benefit the Office of the Auditor General (OAG)

and the following Departments in the MoFEP: i) the Accountant General; ii) Internal Audit; iii)

Customs and Excise; and iv) the Aid Coordination and Management Unit (ACMU). The selection of

these institutions reflects the negotiations undertaken by Bank staff with the South Sudanese

Authorities and priorities identified in the South Sudan Development Plan (SSDP), 2011-13, the

Medium Term Capacity Development Strategy (MTCDS) as well as the South Sudan Aid Strategy

(SSAS).

Implementation timeframe: January 2013-December 2014

Project cost: UA 4.80 million

Project direct beneficiaries: The project will build institutional and human capacities in the OAG and

selected Departments in the MoFEP, including the ACMU, the MoFEP. A direct outcome of a well-

functioning PFM system is enhanced provision of essential public services for the entire population,

including women and the vulnerable sections of the population.

Needs

Assessment

South Sudan (SS) gained independence on 09 July 2011. The new State has critical development

challenges stemming from the bloody and prolonged civil conflict with the North that started in 1955, a

year before Sudan’s independence from Egypt and the United Kingdom in 1956 and ending in 2005

with the signing of the Comprehensive Peace Agreement (CPA) on 9 January 2005 between the Sudan

People’s Liberation Movement (SPLM) and the National Congress Party (NCP). With respect to the

PFM capacity, all policies, systems, institutional arrangements and staffing need to be built almost from

scratch. Capacity building in PFM is rendered even more difficult by lack of long term technical

support to strengthen or build national institutions; lack of updated and disaggregated data to serve as a

basis for government strategies; and policies; lack of skills training facilities; and weak strategic co-

ordination between key national institutions. It is against this background that the Government of the

Republic of South Sudan (GRSS) made a request to the African Development Bank to assist in building

its capacity in PFM.

Bank’s

Added Value

The proposed PFAID is the first operation submitted for consideration by the Board of Directors

to assist the independent state of South Sudan. The project will build and complement other Bank-

supported operations, such as the on-going Institutional Capacity Building for Poverty Reduction and

Good Governance Project (ICBPRGGP) and the support to Juba University provided under the

Governance Trust Fund. Further, the PFAID will complement the on-going capacity building support

by development partners. The Bank’s added value in supporting this project derives from a number of

factors, including: (i) the lessons and experiences gained in preparing and implementing Institutional

Support Projects (ISPs); and ii) the Bank’s long-standing experience in strengthening PFM in various

fragile and post-conflict countries in Africa. In addition, the Bank has gained considerable experience

in supporting capacity development and rebuilding PFM systems in countries neighboring South

Sudan, namely Kenya, Uganda, Tanzania and Rwanda. This experience is vital given that South Sudan

will borrow heavily from the financial systems and programmes from neighboring countries.

Knowledge

Management

The project will contribute to knowledge building to support the recovery and development efforts in

fragile and post-conflict countries, particularly with respect to the modalities of delivering institutional

capacity development projects in support of PFM systems. The findings could also be useful to all

fragile states in Africa, including Somalia, Central Africa Republic etc. The Bank will gather and

disseminate the knowledge generated through monitoring and evaluation reports, mid-term reviews and

Project Completion Reports.

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Results Based Logical Framework

Country and Project Name: Republic of South Sudan- Institutional Support Project for Building Public Financial Management and Aid Coordination (PFAID).

Purpose of the Project: To Support the recovery and development efforts of South Sudan Development Plan, 2011-14.

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES Indicator

(including CSI) Baseline Target

IMP

AC

T

Impact:

Poverty in South

Sudan is

reduced and aid

coordination

strengthened

-GDP annual growth

rate (%)

-Revenue/GDP ratio

-Estimated real

GDP growth of

5.5% in 2011

-Revenue reached

18.% of NGDP in

2011

-GDP growth rate

>6.5% by 2014

-Revenue/GDP ratio

increase to 24% by

December 2014

-Real GDP data

from the South

Sudan Center for

Census, Statistics

and Evaluation

-Government

publications in

2012/13/14

-World Bank and

IMF Surveys in

2012/13/14

Risk # 1: Consolidating peace and security country-

wide:

Despite the remarkable progress being made to

consolidate peace and security country-wide,

possibility of resurgence in instability cannot be

ruled out.

Mitigation: Mitigated by concerted efforts by GRSS

and international community, including the African

Union High Level Panel, especially through the on-

going negotiations on the sharing of oil-revenues,

citizenship and border security.

-Population below

poverty line decline

from 50.6% in 2011 to

46% in 2014

-Incidence of poverty

- 50.6 % of the

population below

poverty line in

2010

Results Based Logical Framework

vi

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES

Indicator

(including CSI) Baseline Target

OU

TC

OM

ES

Outcome 1:

Enhanced

transparency

and

accountability in

use of public

finance

management

systems

Aggregate revenue

outturns compared to

original approved

budget (PI- 3)

-Stock and monitoring

of expenditure payment

arrears (PI-4)

-Public access to key

fiscal information (PI-

10)

-Effectiveness in

collection of tax

revenues (PI-20)

Performance

Indicator (PI)

ratings as captured

in 2010

Assessments of

South Sudan’s

PFM (see

accompanying

Technical Annex

of PFAID):

PI-3 – D (2010)

PI-7—D+ (2010)

PI-10—D (2010)

PI-15—D+ (2010

PI-3 C (2014)

PI-7-above C (2014)

PI-10 above C (2014)

PI-10 above C(2014)

-Bank assessment

of PEFA

-Publications by

GRSS, including

fiscal budget report

-World Bank

publications,

including

Integrated

Fiduciary

Assessments and

IMF Reports

Risk # 2: Weak procurement capacities. Weak

procurement could delay implementation of

operation.

Mitigation: Mitigated by the coordinated provision

of technical assistance, institutional capacity

development assistance by various donors.

Risk # 3: Corruption that could derail

implementation of the operation or lead to shortfall

in donor funding for PFM reforms.

Mitigation: Government ownership and support for

ongoing PFM reforms and the desire to create the

enabling environment for economic growth and

poverty reduction. Vigilance of the anti-corruption

agency to investigate cases of corruption

Risk # 4 : The global economic slowdown reduces

the country’s economic growth and government

revenues

Mitigation: A credible and transparent

macroeconomic management system and improved

policy environment should strengthen GRSS’s

ability to respond to external shocks

Results Based Logical Framework

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RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES

Indicator (including CSI)

Baseline Target

Outcome 2:

Improved aid

coordination for

support to PFM

- Meetings of the GRSS

Donor Forum after the

implementation of the

South Sudan Aid

Coordination

Mechanism, 2011.

-Roll out of the Aid

Information

Management system

(AIMS).

-% of staff in Aid

Coordination and

Management Unit

(ACMU) with training

in aid and debt

management

- Irregular

meetings of the

Sector Working

Groups in 2011

-0%

-At least four meetings

of GRSS Donor Forum

each years, starting

2013

- Four (4) rounds of

aid reporting published

in accessible format.

-All five staff trained

in aid and debt

management and in

the use of Aid

management

Information Systems

(AIMS)

-At least 96 man-

months of consultancy

services provided

-Reports from

donors and the

MoFED, AfDB

supervision reports,

including quarterly

and semi-annual

reports of PFAID

-Aid Reports

published

-Fiscal budgetary

system reports

-Co-financed

projects as a % the

total aid-flow

annually

Risk # 5: Technical assistance does not deliver

sustainable capacity improvement due to insufficient

emphasis on skills transfer

Mitigation: Terms of Reference for project advisor

will contain specific requirements to transfer skills to

local counterparts with measurable indicators of

progress and success, which will be evaluated as part

of project implementation progress.

Results Based Logical Framework

viii

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES

Indicator (including CSI)

Baseline Target

Outcome 3

Increased

mobilization of

tax-revenue by

2014 and

reduction in the

financing of the

budget by oil-

revenue

-Government

expenditures financed

by non-oil revenue in

2011

-Staff trained in PFM,

Auditing, customs and

excise, and specialized

management

.

-Less than 10% of

government total

expenditure was

financed by non-oil

revenue in 2011

-No staff has

received any

training on customs

and excise

operations and

management

-Increase financing of

government

expenditure by non-oil

revenue to more than

20% by end 2014

-At least 50% of the

staff in Customs and

Excise Department in

2012 receive training

in customs and excise

operations, and

management, auditing

and other PFM related

training

-At least five Senior

Officers undertake

secondment/high level

training on customs

management and

administration in

neighboring countries

- Data generated

from Automated

System Customs

data

(ASYCUDA++)

-Fiscal budget for

2012/13/14

- Reports by the

IMF, the World

Bank and the other

donors

-Bank’s annual

Country Policy and

Institutional

Assessments

(CPIA)

Results Based Logical Framework

ix

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES

Indicator (including CSI)

Baseline Target

Outcome 4

Enhanced

operational

effectiveness and

productivity of

beneficiary

institutions

- Staff members trained in

PFM, auditing, aid co-

ordination and

management, customs and

excise, and in specialized

management.

-Staff with professional

training in accountancy in

the MoFEP and OAG

--Annual audit

reports; availability

of reliable data and

regular reports on aid

by the aid

coordination and

management unit;

improved revenue

performance in

customs department;

efficient control

systems in the

Internal audit

department.

- Only 5 staff with

training at the level

of Association of

Chartered Certified

Accountant (ACCA)

-At least 300 staff

receives direct raining in

core PFM systems and

40% of trainees are

women.

At least 300 staff trained

in various aspects of

Customs and Excise

Department, including

use of ICT

Number, type and value

of ICT provided each

years

-20 more staff members

trained to attain ACCA.

-PEFA report for

2012/13/14

PFM progress reports

in 2012/13/14

-Supervision mission

reports

and Mid-term Report

of PFAID

- Annual Report of

the OAG

Results Based Logical Framework

x

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES

Indicator (including CSI)

Baseline Target

Project management and

procurement courses

offered by the PCU

-No qualified staff

fully conversant with

the Bank’s project

management and

procurement

procedures

- At least two course each

year on Bank’s project

implementation

arrangement, including

financial management

and procurement

-At least 4 senior staff

trained on project

implementation and

management annually in

the Bank

Headquarters/Regional

offices over 2013 and

2014

- Reports from the

MOFEP and other

donors

-Quarterly,

supervision, mid-

term review Reports

of PFAID

-Annual Audit

Reports of the PFAID

KE

Y A

CT

IVIT

IES

ACTIVITIES of PFAID

1. PFM training for the Office of the Auditor General

and selected Departments in MoFEP

2. Provision of technical assistance to the Office of the

Auditor General and the following Departments in the MoFEP:

i) Internal Audit; iii) Aid Coordination and Management Union;

iii) Debt Management Directorate and v) Customs and Excise

Department.

3. Provision of office equipment, including computers,

printers, photocopiers, scanners, local area networks etc

INPUTS

ADF : UA4.80 Million

Implementation support supervision mission

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Project Implementation Schedule

Government of South Sudan: Institutional Support Project for Building Public Finance Management Systems and Improving Aid Coordination.

Activities/Years

2011 2012 2013 2014 2015 Action by

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Project Processing and Management

Grant Approval AfDB

Signing Protocol of Grant Agreement AfDB & GRSS

Project Effectiveness and Launching of Project AfDB & GRSS

Supervision and Monitoring AfDB

Mid-term Review AfDB &GRSS

Project Completion Report AfDB &GRSS

Submission of Final Audit Report AfDB/GRSS

Component of Project: Building PFM systems

A. Procurement and distribution of Goods * GRSS

B. Commencement of training activities GRSS

C. Recruitment and deployment of technical assistance GRSS

d. Procurement and installation of local area networks AfDB & GRSS

1

REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP

TO THE BOARD OF DIRECTORS ON A PROPOSED GRANT TO SOUTH SUDAN

FOR INSTITUTIONAL SUPPORT TO PUBLIC FINANCE MANAGEMENT

AND AID CO-ORDINATION (PFAID)

Management submits the following Report and Recommendation on a proposed Grant for UA 4.80

million to the Republic of South Sudan from Pillar III of the Fragile States Facility (FSF) to finance

the Institutional Support to Public Finance Management (PFM) and Aid Co-ordination (PFAID)1.

1. STRATEGIC THRUST AND RATIONALE

1.1 The proposed PFAID is the first operation submitted for consideration by the Bank

Group’s Board of Directors for the new state of South Sudan. The PFAID is essential given that

South Sudan’s development efforts have been constrained by low administrative capacity in the face

of high demands posed by fiscal and policy decentralization. The country has also been managing

substantial inflows of oil revenues and donor resources using limited institutional and human capacity.

As a consequence, spending patterns continue to be governed by cash availability, and reflect the

institutions’ capacity for spending rather than their approved budget appropriations. South Sudan also

faces lack of capacity for tax administration and services delivery at the central, state and local level

which continues to be compounded by the huge influx of internally displaced people and refugees.

The proposed PFAID draws from, and is aligned with the Government’s core governance functions,

the SSDP, 2011-13, the Medium Term Capacity Development Strategy (MTCDS) and the South

Sudan Aid Strategy (SSAS) and therefore commands priority in the GRSS’s development priorities.

1.2 Project Linkages with Country Strategy and Objectives

1.2.1 The proposed operation has strong linkages with the South Sudan Development Plan

(SSDP), 2011-20132, which sets out a medium term agenda for reconstruction and development,

under the broad theme of “Realizing Freedom, Equality, Justice, Peace and Prosperity for All”. The

SSDP has four pillars that encapsulate the development objectives of South Sudan: i) economic

development; ii) social and human development3; iii) governance; and iv) conflict prevention and

security. The PFAID operation will assist in the implementation of the economic development and

governance pillars. The SSDP provides a framework for building the new nation of South Sudan, and

to guide international partners in programming support to the country. The ten states of South Sudan

will follow suit in developing their own state-level development plans in conformity with the

overarching vision articulated in the SSDP, 2011-13. Finally, the plan is supposed to serve as an

instrument for resource mobilization and policy dialogue.

1.2.2 Embedded in the SSDP is “The Medium-Term Capacity Development Strategy

(MTCDS)” that provides a strategic framework for planning and organizing institutional and human

capacity in support of the recovery and development priorities of South Sudan. The objective of the

MTCDS is to ensure that the GRSS can effectively address critical institutional capacity needs

required to implement the SSDP, 2011-13, including building public administration and management

1 This appraisal report of the South Sudan PFAID is accompanied by detailed annexes that elaborate on various aspects of

the project, including the South Sudan Development Agenda, the Medium Term Capacity Development Strategy, the 2011

Aid Strategy for the Republic of South Sudan, Assessment of the Challenges in Public Finance Management systems, and

the Implementation Arrangements, Procurement and Financial Policies and Procedures that will apply in implementing the

operation.. 2 See Directorate of Planning, Ministry of Finance and Economic Planning “South Sudan Development Plan, 2011-13”

Juba, 2011. 3 Also see Annex 2 on South Sudan – Comparative Social Indicators.

2

systems that facilitate the provision of public goods and services to the population under an

accountable and transparent system of governance which is a priority in the MTCDS.

1.2.3 The proposed PFAID is also consistent with the economic governance pillars of the Bank’s

Medium Term Strategy, 2008-2012, and the ADF-12 operational priorities, Bank’s Governance

Strategic Action Plan1, the Strategy for Enhanced Engagement in Fragile States

2, and most important,

the Guidelines on Administration of the Technical Assistance and Capacity Building (TCB) Program

of Pillar III Operations of the FSF3, all of which underscore the important role that good financial and

economic management play in supporting the recovery and development efforts of fragile states.

1.2.4 The PFAID will be implemented within the framework of the Cooperation Agreement4

that was signed between the Bank and the GRSS in September 2011. The first South Sudan

Interim CSP is under preparation.

1.3 Project Linkages with Aid Strategy of South Sudan

1.3.1 The PFAID is closely aligned to the South Sudan Aid Strategy (SSAS) 5

, whose central

objective is the effective management and coordination of aid-inflows into the country within a

Government-led framework. The Aid Coordination and Management Unit in the MoFEP are

responsible for implementing the SSAS. The Government attaches high priority to implementation of

the SSAS, given the current challenges in managing and coordinating development assistance. The

SSAS was formulated utilizing the lessons and experiences learned in the course of implementing the

2006 Aid Strategy. Consistent with the 2005 Paris Declaration on Aid Effectiveness and the Accra

Agenda for Action (AAA), the SSAS is guided by principles which include ensuring that the

development assistance accruing to South Sudan is: i) Government owned and led; ii) aligned with

Government’s policies as set out in SSDP; iii) use Government systems, as much as possible

including the existing institutions for public finance management (PFM); v) is coordinated and

harmonized through sectoral mechanisms; v) managed for achieving results and vi) based on the

principles of mutual accountability.

1.4 Rationale for Bank’s Involvement

1.4.1 The proposed PFAID will contribute to building capacity and accountability in PFM at

the central government (GRSS), the State Governments and Counties. South Sudan is a fragile,

post-conflict country that was engulfed in a bloody civil conflict with the North (Sudan (Khartoum))

for nearly 50 years with few breaks, starting in 1955, a year before independence from Egypt and the

United Kingdom in 1956 and ending in 2005 with the signing of the Comprehensive Peace Agreement

(CPA) on 9 January 2005 between the Sudan People’s Liberation Movement (SPLM) and the National

Congress Party (NCP). Since the signing of the CPA in 2005, the authorities in SS have set out to

build the country almost from scratch by creating economic institutions and working towards

establishing an environment conducive to growth and stability.

1 African Development Bank “ Governance Strategic Directions and Action Plan (GAP), 2008-2012”

ADF/BD/WP/2008/40 or ADB/BD/WP/2008/70 2 African Development Bank “Strategy for Enhanced Engagement in Fragile States” ADF/BD/WP/2008?10 or

ADB/BD/WP/2008/37 3 African Development Bank “The Fragile States Facility (FSF): Guidelines on Administration of the Technical Assistance

and Capacity Building (TCB) Programs of Pillar III Operations” ADF/BD/WP/2010/44 or ADB/BD/WP/2010/75 4 See African Development Fund “Proposal for a Cooperative Agreement with the Republic of South Sudan Pending its

Membership in the Bank Group” July 2011. 5 Government of the Republic of South Sudan (2011) “Aid Strategy for the Government of South Sudan” Ministry of

Finance and Economic Planning (MoFEP), August, 2011.

3

1.4.2 Considerable progress has been made that culminated in the attainment of independence on 09

July 2011. As is the case with other fragile states in Africa, South Sudan faces formidable

development challenges, including the lack of institutional and human capacity that severely

constrains the implementation of its development agenda. Public administration at all levels lacks the

basic human, financial and logistical means to deliver services. Infrastructure services are also non-

existent in many parts of South Sudan. Moreover, a majority of civil servants have not had any formal

training for several years due to the prolonged civil conflict. Accordingly, the institutional and human

capacity in South Sudan is characterized by low level of productivity and service delivery that has

forced Non-Governmental Organizations, the United Nations Agencies, Funds and Programs, NGOs

and religious organizations to step in with the objective of covering the gaps.

1.4.3 The weak human resources base, combined with lack of systems, absence of a robust legal

framework, and weak institutions in South Sudan have proven to be the greatest challenge to the

development of the PFM systems in the country1. However, over the past three years there have been

notable improvements including: i) in the budget formulation process; ii) the introduction of an

integrated financial management system (IFMS) in the MoFEP; and iii) strengthening the support for

procurement agents. More recently, a draft Public Finance Management and Accountability Bill

was prepared by the Ministry of Legal Affairs and Constitutional Development, and submitted to

Parliament for consideration. Despite these efforts, substantial challenges remain in developing

functional PFM systems. The Minister of Finance and Economic Planning while presenting the budget

for fiscal year 2010 confirmed the current challenges by noting that corruption can undermine the best

budgets and that the greatest issues in South Sudan are irregular and over-priced procurements, self-

awarded allowances, and ghost workers, which are clear pointers to the continuing weaknesses in the

PFM system. The management and accountability of public sector resources therefore remains a

central issue in South Sudan.

1.4.4 There is also a need to improve transparency and accountability of the financial

resources that accrue to the ten (10) states of South Sudan. These resources could be significant,

particularly for states that have oil revenues. States also have the power to legislate to raise revenue

collection from the various sources and areas such as: i) State land and property tax and royalties; ii)

User charges and fees for state services; iii) State licenses; iv) State personal income tax; v) Levies on

tourism; iv) State enterprises and projects and national parks; vii) Stamp duties on State transactions,

and viii) other taxes that do not encroach on South Sudan Government taxes. Extending the PFM

support to the states and counties is therefore critical.

1.4.5 The project will also assist in improving aid management and coordination. The MoFEP

does not have a well-functioning, staffed and equipped Aid Coordination and Management Unit

(ACMU). To strengthen the capacity of the ACMU, a number of challenges need to be addressed

including i) reviewing existing aid financing arrangements to ensure that there is appropriate

alignment with the priorities set in the SSDP, 2011-13; ii) having donors provide estimates of their

future aid commitments on a rolling three-year basis; iii) reduce current substantial fragmentation of

aid programs along with increased emphasis on multi-year commitments to priority programs; and iv)

in close collaboration with the donor community, strengthen arrangements for monitoring the status of

on-going donor funded projects and programs and for evaluating their effectiveness. To address these,

and other pressing concerns, the ACMU will need to implement a program of capacity building and

technical support over the two-year period, 2012-13.

1.4.6 Early action in strengthening the capacity of the ACMU is critical in order to position it to play

an important role in the preparation of the next National Development Plan starting 2014. The PFAID

will therefore provide technical assistance (TA) that will facilitate aid coordination principally through

1 See Government of the Republic of South Sudan “Public Finance Management Assessment: Based on the Public

Expenditure Financial Accountability Framework (PEFA)” September 2011.

4

on-the-job training for the local counterparts and the transfer of skills with a view to improving aid

management and coordination and producing timely, accurate and reliable data and reports on aid

inflows and use. The TA will further assist in revitalizing the Donor Coordination Forum. The project

will also offer overseas training opportunities in aid management as well as provide the relevant

equipment and software.

1.4.7 The PFAID complements and adds value to Government and other development

partners’ efforts to address the challenges faced by South Sudan. The rationale for the PFAID is

three-fold: first the PFAID will assist in strengthening institutional capacity for managing the

country’s public finance systems and aid coordination. Severe organizational weaknesses in the

country’s PFM institutions and systems continue to seriously hamper the development and peace

building efforts of South Sudan. Second, by building the capacity of the OAG and key Departments in

the MoFEP, the project will help fight corruption and wasteful leakages of the scarce public sector

resources. Third, the project will help consolidate gains in financial and economic governance reform

supported under the Pillar III of the FSF and the ongoing ADF - financed Institutional Capacity

Building for Poverty Reduction and Good Governance and the support to Juba University.

1.4.8 Overall therefore, the PFAID will contribute to strengthening fiduciary standards while

ensuring that public resources are used for the intended purposes and reach the targeted beneficiaries.

The PFAID will also contribute to moving the country closer to achieving compliance with

international standards of financial management, including the use of internationally recognized

accounting and auditing systems and reporting standards through application of modern ICT.

1.5 Institutional Arrangement and Donor Intervention in PFM

A) Institutional Arrangement

1.5.1 Ministry of Finance (MoFEP): This project focuses on two main areas of governance in the

economy, namely: i) the public financial management system; and ii) aid coordination and

management in South Sudan. Within the PFM system, the project will support the Office of the

Auditor General (OAG) and four (4) functionally interlinked Departments in the MoFEP - Internal

Audit; Accountant General; and Customs and Excise Departments. Under aid co-ordination, the

PFAID will strengthen capacity of the Aid Coordination and Management Unit, in the MoFEP.

1.5.2 The MoFEP is headed by a Minister with two Deputy Ministers and two Under Secretaries and

has seven (7) Directorates: i) Procurement; ii) Accounts; iii) Budget; iv) Internal Audit; v) Taxation;

vi) Planning; and vii) Administration and Finance. Amongst other tasks, the MoFEP is responsible for

i) formulating and administering the national budget; ii) mobilizing financial resources to finance

government programmes; iii) collecting revenue due to government; iv) carrying out macroeconomic

reviews and recommending policies that support macro-economic stability and promote economic

growth and poverty reduction; and v) providing policy guidance to the Bank of South Sudan.

1.5.3 Internal Audit Department, the MoFEP: As is the case with other Departments in the

MoFEP, there is a dearth of capacity in the Internal Audit Departments, which is characterized by

inadequate staffing, lack of office equipment and infrastructure, absence of appropriate regulatory

legal framework and inadequate logistics for field work (transport, computers etc.). To improve

productive capacity, the departments need immediate support in the development of legislative

instruments for internal audit, extensive training of existing staff and those coming from Sudan

(Khartoum) and the provision of basic office equipment, including audit soft-wares, computers,

printers, photocopiers and networks, and technical assistance and advisors.

5

1.5.4 Customs and Excise Department: USAID commissioned a study on the customs and Excise

Department of South Sudan in 2010. The findings of the study are that the Department lacks a i)

comprehensive GRSS border infrastructure/equipment; ii) clear mandate of customs role; iii) proper

revenue collection and accountability; iv) clear exemptions procedures; and v) internal-control

mechanisms, inadequate border enforcement and security measures and virtually no automation. The

PFAID will address these constraints with the objective of increasing the non-oil tax revenue that

accrues to GRSS. Accordingly, the project will provide office equipment, wireless internet networks

and large-scale training in basic and advance Customs and Excise Administration, in addition to other

office equipment including the installation and implementation of ASYCUDA++. The project will

also make provisions for study tours to neighboring countries with the objective of learning about the

management of their taxation policies and procedures.

1.5.5 Aid Coordination and Management Unit (ACMU): The ACMU is housed in the MOFEP.

As at July 2011, the ACMU had a staff complement of six who were assisted by one technical adviser.

More recently, a Debt Management Directorate (DMD) was added to the ACMU. Under the MOFEP,

the DMD is entrusted with the responsibility of formulating, implementing and coordinating South

Sudan’s external assistance and to prepare and implement the overall debt strategy of the country. The

DMD therefore constitutes an important element of public financial management systems in South

Sudan and is expected to contribute significantly to investment planning and programming.

Notwithstanding its important functions, the DMD has an urgent need for qualified personnel,

especially debt management specialists and experts. Currently, the DMD is poorly staffed and lacks

the operational tools, including debt management soft-wares to work effectively.

1.5.6 Office of the Auditor General (OAG): The OAG was created as an independent office

through the Interim Constitution of South Sudan. Through this arrangement, an Audit Chamber was

established in 2005. Prior to 2010, very few audit reports were prepared because of lack of manpower

and the legal framework for auditing public sector entities. The mandate of the Auditor General as

stipulated in the interim constitution relates to carrying out audit of public sector entities within

statutory set deadlines, and assessing the efficiency and effectiveness of the central government,

courts, local authorities, national assembly, statutory bodies/states corporations, commissions, and

submit reports to the Parliament.

1.5.7 On account of the huge backlog of unaudited public accounts, the President of the Republic of

South Sudan signed a provisional law in January 2011 that facilitated the appointment of an Auditor

General and the preparation of an audit manual. Relevant professional staff were also recruited for the

OAG. The results of this commendable initiative have been that the OAG was able to prepare and

submit to Parliament the audit reports for 2005 and 2006. The audit reports for 2007, 2008, 2009 and

2010 –were finalized and presented to Parliament. Presently, as the audit chambers does not have the

requisite capacity to carry out systems auditing, specialized audits and evaluations, it does only

financial auditing. Other challenges faced by the Office include poor skills of staff, inadequate funds

and absence of time saving ICT. The proposed project will, therefore, provide consultants to assist in

finalizing audits, train inspectors and audit managers and audit public sector institutions. It will also

provide training in procurement and forensic audit.

B) Donor Coordination

1.5.8 Evidence in the field tends to suggest that coordination among donors along the lines

envisioned in the Paris Declaration is less than satisfactory in South Sudan. Within the seven

Directorates of the MoFEP, for example, there is a myriad of small and un-coordinated interventions

in PFM. There is the Capacity Building Trust Fund (CBTF), which is a pooled fund financed by seven

donors namely Norway, Denmark, Sweden, The Netherlands, Spain, Canada and the United Kingdom.

The first phase supported capacity building operations of about US$30 million, while the second

6

phase envisions providing about US$75-90 million for institutional capacity development. The Joint

Donor Team (JDT) acts as the secretariat for the fund. It focuses essentially on improving civil service

capacities in PFM.

1.5.9 Various aspects of PFM are supported by Other Donors. Norway and the United States

Agency for International Development (USAID) are supporting the Management of oil revenues,

while the process of budget preparation is being funded by USAID. The World Bank and UNDP are

supporting the improvement of procedures for public expenditure, and the payroll and payment

systems and procurement audit is funded by the Multi Donor Trust Fund (MDTF) and the World

Bank.

1.5.10 The Bank and the World Bank assisted in preparing the South Sudan Integrated Fiduciary

Assessment (SSIFA) and Public Expenditure and Financial Accountability (PEFA) assessment. The

Bank further supported the preparation of the PFM Bill. Moving forward, the GRSS has requested that

more support be provided by the Bank in implementing some aspects of the PFM Bill. The IMF

launched a trust fund amounting to about US$10 million that aims at developing various aspects of

PFM and strengthening the Central Bank with the objective of ensuring that it discharges its

constitutional responsibilities more effectively. The support from the IMF will also contribute to

building the country statistical capacity and putting in place the legislative framework required for

effective economic and financial management. Annex 3 provides a matrix showing the main areas of

donor intervention in the South Sudan PFM system.

1.5.11 The Bank is further providing support to the University of Juba, in PFM with resources in the

amount of UA0.482 million provided under the Bank’s Governance Trust Fund. The objective of this

project is to enhance the capacity of the University of Juba to provide training in auditing, fiduciary

management and resource mobilization with a view to enhancing functional capacities of public sector

officials, in improving public service delivery. The target beneficiaries include the academic

staff/faculties (e.g., social science, management and education) of the university of Juba and public

sector officials of various ministries and departments of the (GoSS) dealing with auditing, fiduciary

management and resource mobilization. The South Sudan PFAID will complement the Bank’s support

to the University of Juba (see Annex 4)

II. PROJECT DESCRIPTION

2.1 Project Components

2.1.1 Project Objectives: The project’s broad objective is to support the recovery and development

efforts of South Sudan through the effective implementation of the SSDP, 2011-13. The specific

objectives of the PFAID are to (i) build and enhance transparency and accountability in the use of

public resources through training, skills transfers in the OAG and MoFEP; ii) improve aid

coordination; and iii) enhance the operational effectiveness of beneficiary institutions by providing

basic office equipment, including ICT.

2.1.2 Project Components: The project has four (4) mutually reinforcing components including: (i)

building state capacity and accountability in public finance management in South Sudan; ii)

improving aid coordination and effectiveness; iii) enhancing domestic revenue mobilization; and iv)

strengthening capacity for project management. The support will be channeled through i) large-scale

training of staff in beneficiary institutions; ii) providing Technical Assistance (TA) and consultancy

services; iii) providing office equipment and ICT assistance to enhance the operational effectiveness

of the beneficiaries ; and iv) strengthening project management in the MOFEP. The major activities

under each component are summarized in Table 2.1 while the detailed description of project

components and costs is presented in Technical Annex B2.

7

Table 2:1 Project components No Component Costs (UA

million)

Description

1 Building State

Capacity and

Accountability in

Public Finance

management

1.569 Support will enable State institutions to undertake in a timely manner

the audit of all Government Ministries and Departments, and to act as

useful watchdogs over the utilization of public finance resources.

Planned training programs will aim at upgrading skills of staff in both

organizations by providing them with relevant professional courses in

accounting methods and systems, systems audit, certificate audit, fraud

and irregularity audit, performance audit, computer audit, and personal

effectiveness skills. The component will further provide the OAG and

the Internal Audit Department with modern auditing soft-wares and

other ICT complemented by short-term local and overseas training

programs for selected professional staff.

The component will further provide technical assistance to both the

Internal Audit Department and OAG that will assist in drafting internal

audit bill and internal audit regulations and for engaging reputable

auditing firms to assist in clearing the existing backlog of unaudited

public sector accounts.

Local area networks enhance the operational effectiveness of

beneficiary institutions by facilitating access and sharing of operational

information and data.

2 Improving Aid

Coordination and

Effectiveness

0.900 Support for improving aid coordination and effectiveness shall

translate to:

a) enhancement of the Aid Information Management System (AIMS)

database and rolling it out to donor community for data entry and line

ministries for enhanced access to donor information;

b) advise on decentralization of donor programs to States and Counties

as proposed by the MoFEP in the “Development of Aid Instruments”

and

c) assisting in formulating specific sector programs for donor support,

particularly in infrastructure.

Relating to the DMD, the support will involve the procurement of

software for debt management and the training of staff in short Debt

Management courses and in more specialized overseas training

programs. Support will further facilitate training-by-secondment of

selected DMD staff to similar institutions in neighboring countries in

the region to learn from best practices in debt management.

3 Enhancement of

Domestic Revenue

Mobilization

1.409 To minimize heavy dependency on oil revenues, the Bank with other

partners will help revive and capacitate the Customs and Excise

Department by providing working tools, including ICT, equipment,

such as cargo scanners and the large scale training of staff in the

Department in courses such as l basic and advanced Customs and

Excise Administration.

Support study tours to neighboring countries with the objective of

learning about the management of their taxation policies and

procedures.

8

4

Project Management

0.922 Hiring project coordinator, a project accountant and procurement

expert, who will be entrusted with the responsibility of implementing

the PFAID and other Bank-funded operations for South Sudan. The

experts will be trained on programs focused on various aspects of the

project cycle, including project identification, preparation and

appraisal, as well as project monitoring and evaluation.

In addition, the PCU team will receive the normal training on Bank

rules of procedures for auditing, procurement, disbursement and

general policies on portfolio management. The training for the PCU

will mainly be conducted with the assistance of the Bank and is

expected to be offered three times during the life cycle of the PFAID

project.

In partnership with the Bank, the staff of the PCU will be expected to

organize training programs for public service staff on Bank’s project

implementation policies and procures. The PFAID will also provide

basic equipment consisting of two desktop computers, a fax machine

and telephone connection for the unit and oversee the TAs provided in

South Sudan.

TOTALS 4.800

2.2 Technical Solution Retained and other Alternatives Explored

2.2.1 During project preparation, several options were explored, including the i) scope of the support

to be provided to the MoFEP; ii) Departments in the MoFEP that should benefit from the operations;

iii) modalities of the capacity building to be provided, i.e. whether training should be provided at

regional/international training institutions or in-country through specifically designed, short-term

training courses provided by local/regional experts or through local training institutions. On the choice

of the executing agency, the options considered were either to establish a dedicated Project

Coordination Unit (PCU) within the MoFEP or to have the project implemented by the PCU of the on-

going Institutional Capacity Building for Poverty Reduction and Good Governance

(ADF/BD/WP/2007/17). Management, in close collaboration with the GRSS, opted to establish a new

PCU in the MoFEP, because the implementation of the on-going institutional support project will be

completed in December 2012. The PCU is fully justified on grounds of the weak project

implementation capacity in South Sudan, and will have several functions, including i) assisting in

implementing Bank Group’s operations; ii) providing training on Bank Group’s implementation

policies and procedures; iii) overseeing the technical assistance provided by the PFAID; and iv)

assisting in the preparation of South Sudan PFM training needs assessment and design a training

program to inform future donor interventions. The proposed PFAID will be implemented over a two-

year period after effectiveness, which is expected in the first quarter, 2013.

2.3 Project Type

2.3.1 The proposed operation is an investment operation financed by grant resources from the

Technical Assistance and Capacity Building Window (Pillar III) of the FSF. The project focuses on

four inter-related areas that are outlined in Table 2.1, and is part of the on-going efforts by the

international community, including the Bank, to assist in rebuilding the PFM systems of South Sudan.

The project is designed to provide synergic linkages to the Bank’s on-going Institutional Capacity

Building for Poverty Reduction and Good Governance and other capacity building support provided

to South Sudan. Annex 4 provides information with respect to Bank Group Operations by fourth

quarter of 2012.

9

2.4 Project Cost and Financing Arrangements

2.4.1 The estimated total cost of the project, net of taxes and duties, is UA 4.800 million or

approximately US$ 7.612 million1. A contingency of 9% have been factored in the project cost that

comprises 7% and 2% for physical and prices contingencies, respectively. Tables 2.2 and 2.3 below

present the estimated project cost by component and sources of finance, whereas Tables 2.4 and 2.5

present the estimated project costs by Category of Expenditure. Details of the project cost by

component and expenditure categories are presented in Technical Annex B1.

2.4.2 The Bank will finance the entire cost of the project. This is consistent with the Bank’s

Policy on Expenditures Eligible for Bank Group Financing2, which permits the Bank to finance 100%

of the total cost of projects and programs for fragile regional member states. South Sudan is eligible

for Pillar III of the FSF, but access to Pillar I will have to be established through a relevant

programming document that is approved by the Boards of Directors.

Table 2.2: Project Cost Estimates by Component (in ‘000)

Local Foreign Total Local Foreign Total

512,47 1 754,08 2 266,55 323,14 1 106,05 1 429,19 77 33

327,57 967,84 1 295,41 206,55 610,28 816,83 75 19

443,36 1 599,49 2 042,85 279,56 1 008,57 1 288,13 78 29

586,52 750,47 1 337,00 369,83 473,22 843,05 56 19

5 071,89 6 941,81 1 179,09 3 198,11 4 377,20 73 100

130,47 379,32 509,79 82,27 239,18 321,45 74 7

57,82 102,91 160,72 36,46 64,89 101,34 64 2

2 058,20 5 554,11 7 612,32 1 297,81 3 502,18 4 800,00 73 110

TOTAL BASILINE COSTS

Physical Contingencies

Price Contingencies

TOTAL PROJECT COSTS

Components

Building State Capacity and

Accounability for Public Finance

Management Improving Aid Coordination and

Effectiveness

Enhancing Domestic Revenue

Mobilization

Project Management

(US$ '000) (UA '000)

%

Foreign

Exchange

% Total

base

Costs

Table 2.3: Sources of Financing (in“000)

1 568,99 32,7 1 558,57 99,3

899,62 18,7 893,36 99,3

1 409,67 29,4 1 395,28 99,0

921,72 19,2 894,77 97,1

4 800,00 100,0 4 741,99 98,8

PROJECT COST SUMMARY

Cost Including

Contingencies

% of

Total

AfDB

Financing

%

Financing

Building State Capacity and Accountability

Improving Aid Coordination and Effectiveness

Enhancement of Domestic Revenue Mobilization

Project Management

TOTAL PROJECT COSTS

1 Local costs are estimated in United States Dollars (US$) because during the appraisal of the PFAID operation, South

Sudan was in the process of introducing a new currency that was rolled out after independence in July 2011. 2 See African Development Bank “Policy on Expenditures Eligible for Bank Group Financing”

ADB/BD/WP/2007/106/Rev.1 - ADF/BD/WP/2007/72/Rev.1, 12 February 2008

10

Table 2.4: Project Cost by Category of Expenditure (in 000)

Foreign Local Total Foreign Local Total

745,19 319,37 1 064,55 469,88 201,38 671,26 70 15

315,00 105,00 420,00 198,63 66,21 264,83 75 6

2 478,75 826,25 3 305,00 1 562,99 521,00 2 083,99 75 48

1 206,00 - 1 206,00 760,45 - 760,45 100 17

180,00 120,00 300,00 113,50 75,67 189,17 60 4

3 864,75 946,25 4 811,00 2 436,94 596,66 3 033,61 80 69

4 924,94 1 370,62 6 295,55 3 105,45 864,25 3 969,70 78 91

- 211,20 211,20 - 133,17 133,17 - 3

- 63,80 63,80 - 40,23 40,23 - 1

30,80 25,20 56,00 19,42 15,89 35,31 55 1

58,55 47,90 106,46 36,92 30,21 67,13 55 2

- 16,80 16,80 - 10,59 10,59 - -

89,35 89,90 179,26 56,34 56,69 113,03 50 3

57,60 134,40 192,00 36,32 84,75 121,07 30 3

146,95 499,30 646,26 92,66 314,84 407,50 23 9

5 071,89 1 869,92 6 941,81 3 198,11 1 179,09 4 377,20 73 100

379,32 130,47 509,79 239,18 82,27 321,45 74 7

102,91 57,82 160,72 64,89 36,46 101,34 64 2

5 554,11 2 058,20 7 612,32 3 502,18 1 297,81 4 800,00 73 110

(US$ '000) (UA '000) % Foreign

Exchange

% Total

Base

CostsCategory of Expenditures

Total PROJECT COSTS

4. General Operating Charges

Total Recurrent Costs

Physical Contingencies

Price Contingencies

2. Daily Subsistence Allowance

3. OPERATION & MAINTENANCE

Office

Equipment

Facilities

Subtotal 3. OPERATION & MAINTENANCE

Technical Assistance

Studies

Subtotal 3. SERVICES

B. Recurrent Costs

Total Investment Costs

1. Personnel

A. Investment Costs

1. GOODS

Equipment

2. WORKS

3. SERVICES

Training

11

Table 2.5: Expenditure Schedule by major Component

Total % Amount

214,70 128,07 298,57 29,92 671,26 5,0 33,56

- - - 264,83 264,83 8,0 21,27

794,50 599,03 655,78 34,68 2 083,99 8,0 167,39

272,40 45,40 272,40 170,25 760,45 8,0 61,08

126,11 31,53 31,53 - 189,17 5,0 9,46

1 193,01 675,96 959,71 204,93 3 033,61 7,8 237,92

1 407,72 804,02 1 258,28 499,68 3 969,70 7,4 292,76

- - - 133,17 133,17 5,0 6,66

- - - 40,23 40,23 8,0 3,23

- - - 35,31 35,31 8,0 2,84

21,47 12,81 29,86 2,99 67,13 8,0 5,39

- - - 10,59 10,59 8,0 0,85

21,47 12,81 29,86 48,90 113,03 8,0 9,08

- - - 121,07 121,07 8,0 9,72

21,47 12,81 29,86 343,37 407,50 7,0 28,69

1 429,19 816,83 1 288,13 843,05 4 377,20 7,3 321,45

104,46 60,77 93,45 62,77 321,45 - -

35,34 22,02 28,08 15,90 101,34 7,0 7,13

1 568,99 899,62 1 409,67 921,72 4 800,00 6,8 328,58

- - - - - - -

1 211,87 669,84 1 102,16 518,31 3 502,18 7,0 243,79

Physical Contingencies

COMPONENTS

Training

BUILDING STATE

CAPACITY &

ACCOUNTABILITY

FOR PUBLIC FINANCE

MANAGEMENT

IMPROVING AID

COORDINATION

AND EFFECTIVENESS

ENHANCEMENT OF

DOMESTIC REVENUE

MOBILIZATION

PROJECT

MANAGEMENT

I. Investment Costs

A. GOODS

Equipment

B. WORKS

C. SERVICES

Subtotal OPERATION & MAINTENANCE

Technical Assistance

Studies

Subtotal SERVICES

Total Investment Costs

II. Recurrent Costs

A. PERSONEL

B. DAILY SUBSISTENCE ALLOWANCE

C. OPERATION & MAINTENANCE

Vehicle

Equipment

Facilities

Taxes

Foreign Exchange

D. GENERAL OPERATING CHARGES

Total Recurrent Costs

Physical Contingencies

Price Contingencies

TOTAL

Table 2.6: Expenditure by years

2012 2013 2014 Total

Building State Capacity and Accountability for Public

Finance Management 842,30 584,86 2,03 1 429,19

Improving Aid Coordination and Effectiveness 434,22 380,04 2,57 816,83

Enhancement of Domestic Revenue Mobilization 887,87 399,88 0,38 1 288,13

Project Management 605,16 237,89 - 843,05

2 769,55 1 602,67 4,98 4 377,20

Physical Contingencies 197,36 123,69 0,40 321,45

Price Contingencies 37,73 63,22 0,39 101,34

TOTAL 3 004,64 1 789,58 5,78 4 800,00

Taxes - - - -

Foreign Exchange 2 187,95 1 311,12 3,12 3 502,18

Components

(UA '000)

Base Costs

12

2.5 Project’s Target Area and Beneficiaries

2.5.1 This project will benefit the Government and the people of SS in several ways. First, the

project will significantly assist in building the weak human and institutional capacity in the public

sector financial management system in SS. Second, the project will contribute to promoting good

economic governance and the fight against abject poverty. Third, the project will result in improved

service delivery in the country arising from efficiencies in PFM. Finally, the project is expected to

result in an increase in non-oil revenue thus availing much needed additional reesources to finance the

government’s development agenda, as outlined in SSDP, 2011-13.

2.6 Participatory Process for Project Identification, Design and Implementation

2.6.1 Consultations with stakeholders were undertaken during the appraisal of the project in June-

July 2011. The Bank Group consulted widely with several Senior Government officials, including the

then Minister of Finance and Economic Planning. The consultations centred on the policy and/or

legislative constraints, human capacity development needs, and the equipment and working tools

required for facilitating productivity in key public finance management institutions in the GRSS.

Within the MoFEP, the Bank Group held detailed consultations with senior staff of the following

Departments i) the Aid Co-ordination; ii) Accountant General; iii) Internal Audit; iv) Income Tax; v)

Macroeconomic Policy; and vi) Customs Department. The Bank Group also undertook extensive

dialogue with the OAG and the Southern Sudan Centre for Census, Statistics and Evaluation

(SSCCSE).

2.6.2 The Bank Group also held detailed consultations with partners, including the UNDP, USAID,

DFID and the Joint Donor Team (JDT) that comprises the United Kingdom (UK), Canada, Norway,

Sweden, Denmark and the Netherlands. The consultations focused on the central role, and long-

standing experience of the Bank and the Fragile States Facility (FSF) in supporting institutional

capacity development in fragile and conflict-affected countries in Africa, and the synergy of the

proposed operation with the ongoing assistance being provided by the Bank and other partners to the

GRSS. Consultations with donors also focused on the way forward with respect to addressing the

huge capacity building challenges in South Sudan. The dialogue initiated with the South Sudan

Authorities and in-country donors was enhanced during the preparation of the project and will

continue in the implementation phase.

2.7 Bank Group Experience and Lessons Reflected in Project Design

2.7.1 The proposed PFAID is the first operation submitted for consideration by the Bank

Group’s Board of Directors for the new state of South Sudan. The Bank Group, as is the case with

other donors, has been inactive in Sudan since 1995 due to conflict and sanctions induced by

outstanding arrears to the International Finance Institutions (IFIs) and the wider donor community.

The Bank’s re-engagement started after 2005 and focused mainly on i) fostering national dialogue; ii)

providing capacity building; and iii) knowledge generation through economic and sector work.

2.7.2 The on-going operations in South Sudan are: (i) Institutional Capacity Building for Poverty

Reduction and Good Governance Project (ICBPRGGP), approved in March 2007 for UA 9.62 million

in the form of an ADF grant (ADF/BD/WP/2007/17); and, (ii) the FSF pillar III grants supporting

various capacity building and technical assistance activities in South Sudan. The ICBPRGGP supports

activities both in the North (30%) and South (70%) with three major outputs: carrying out Household

Survey, supporting the preparation of the Poverty Reduction Strategy Paper (PRSP) and providing

support at the State levels. The ICBPRGGP, disbursed at 82.5%, is expected to be completed by

December 2012.

13

2.7.3 A Project Completion Report (PCR) for the on-going institutional support project

(ICBPRGGP) will be prepared in early 2013. Nonetheless, the lessons and experiences of

implementing the operation have informed the PFAID. Besides, the Bank has also prepared several

institutional support projects for post-conflict countries such as Sierra Leone, Liberia and Burundi that

have been vital in informing the proposed PFAID. The PCRs of some of these operations conclude

that the Bank’s capacity building and institutional support interventions have made significant

contributions, particularly in rebuilding and strengthening PFM in beneficiary countries. The Bank’s

specific intervention in the case of Liberia and Sierra Leone was in strengthening the institutional

capacity of the Office of the Auditor General and selected departments in the MoFEP involved in

PFM.

2.7.4 Key lessons learned from the Institutional Support Projects in fragile and conflict affected

Regional Member Countries (RMCs) of the Bank include:

i) Ensuring strong country commitment and ownership of operation: This lesson is clearly

reflected in the design of the South Sudan Operation given that the project’s components and

beneficiaries were negotiated directly with the government. The GRSS also continues to

express strong commitment to building PFM systems, as reflected in the SSDP and the

MDTCDS. Management therefore hopes that this demand driven intervention in the high

priority area of strengthening the PFM will assist in improving the fiduciary environment in

South Sudan;

ii) Flexibility and simplicity of project design: The operation is small and the project design

made very simple. It involves direct class-room type training, the provision of technical

assistance and consultancy to undertake specific functions with on-the-job training, as well as

the provision of IT and other office equipment aimed at enhancing the operational efficiency

of beneficiaries;

iii) Need to ensure a clear transitional strategy to consolidate the gains made: The operations

will provide on-the-job training of incumbent and new staff joining the civil service of South

Sudan from Sudan (Khartoum). It will also provide training-of-trainers to ensure that the OAG

and the MoFEP are able to continue training staff after the end of the project; and

iv) Aid coordination and management is critical in countries with weak institutional and human

capacity, such as South Sudan, and could contribute to significantly improving the

effectiveness and impact of donor engagement, reduce duplication and wastage of scarce

public sector resources, and assist in creating synergies between donor operations. It’s against

this background that the GRSS has requested the assistance of the Bank to strengthen the aid

coordination function of the MoFEP.

2.7.5 These lessons are clearly reflected in the design of the South Sudan PFAID. The operation was

fully negotiated by the Bank Team and the GRSS, and the agreements reached have captured key

recommendations and understandings reached with respect to the design of the PFAID. Further, an

advanced PAR was forwarded to the South Sudan Authorities for their review and consideration.

Overall, the GRSS was satisfied with the design of the PFAID and made some minor adjustments that

have been reflected in the current PAR that is presented for review and consideration by the Board of

Directors.

2.8 Key Performance Indicators

2.8.1 The key performance indicators identified and the expected outcomes at project completion are

presented in the results-based logical framework (page viii). The expected outcomes under the first

component “improving state capacity and accountability in public finance management includes,

inter-alia, clearing the backlog of unaudited public sector accounts, significantly improving coverage

of the Annual Auditor General Reports and related follow up actions. The second component relating

to improving aid coordination and effectiveness will translate into improved service delivery and

14

uplifting of the standard of living of the population. The third component of enhancement of domestic

revenue mobilization will result in improved non-oil revenue collection to finance budgetary

operations. The outcomes will be monitored using progress reports, qualitative assessments through

regular monitoring and evaluation through field supervisions by Project Task Team and Field office

Staff, mid-term review report, and financial auditing by appropriate Bank staff and external auditing

firms. These will be supplemented by other assessments that will emerge from the continuous

stakeholder consultation process that is incorporated throughout the project.

III. PROJECT FEASIBILITY

3.1 Economic and financial performance

3.1.1 The expected economic and financial benefits of the PFAID by far outweigh the

investment cost of the operation in the amount of UA 4.80 million. However, paucity of data in

South Sudan makes it difficult for the Bank to identify and quantify the direct and indirect economic,

financial and social benefits of the intervention. However, beyond the cost-benefit analysis, the pay-

off of the PFAID is enormous. While the costs are quantifiable (section 2.4), the benefits are indirect

and result in improved economic and social benefits , ultimately seen in the context of reduced

leakages in the country’s fiscal budget, improved productivity and improved service delivery as

budgetary resources reach the intended beneficiaries, and better performance of the public financial

management institutions leading to reduced costs of service delivery in this case the OAG and several

critical Departments in the MoFEP. Effective implementation of the project will further contribute to

improving the credibility of the fiscal budget through better internal controls, enhanced oversight and

increased transparency and accountability. The project will also support the development of human

resource capacity leading to higher lifetime income earnings, thereby ensuring that the benefits will

last over a long-term period.

3.2 Environmental and Social Impacts

3.2.1 The project has been classified as Category III by ORQR and will therefore have no

adverse effect on the environment. This category III classification implies that the project is not

expected to have any adverse environmental impact for which an environmental assessment is

normally necessary. Indeed, the project may impact positively on the environment through the

deployment of additional resources into the sector resulting from improved fiscal performance.

3.2.2 Gender: Gender inequality is a critical challenge in South Sudan. The literacy rate for males is

55% compared to 28% for females. Women also have unequal access to education, control over assets

and decision-making. However, the GRSS has shown the political will to empower women by putting

the right policies and laws in place to promote gender equity. As a consequence, the ratio of girls to

boys in primary, secondary and tertiary education has been rising. Similarly, the proportion of posts

held by women in the GRSS has increased. However, challenges remain. The proposed operation will

support government’s plans to enhance gender mainstreaming into its development programs by

aiming to ensure that at least twenty-five percent of the participants of each course offered by the

PFAID are women and by introducing and strengthening gender responsive budgeting in the MoFEP

to ensure gender concerns are not left out in economic planning and budgeting.

3.2.3 Social: The Institutional Support Project will contribute to improved social services

through increased non-oil fiscal revenues for financing the SSDP. Strengthening PFM systems

will help improve the capacity of the beneficiary institutions, significantly improve revenue

performance and contribute to the fight against poverty reduction which is a compelling development

objective. The net effect of this intervention is that additional resources will be available that could

benefit the poor directly through increased budgetary allocation for the social sectors of health,

education and rural infrastructure. In addition, as development partners move towards budget support,

15

an overall improvement in PFM systems would provide the required assurance that public resources

are being used for their intended purposes.

IV. IMPLEMENTATION

4.1 Implementation Arrangements

4.1.1 Executing Agency (EA): The MoFEP is the lead agency which will be responsible for project

implementation of PFAID in collaboration with the beneficiary institutions. Overall implementation of

the PFAID project will take place under the supervision and guidance of the Project Steering

Committee (PSC) which is expected to have representation of the various beneficiaries of the PFAID in

partnership with the Bank’s South Sudan Field Office. Management further proposes that the

chairmanship of the PSC be held by the Under-Secretary, MoFEP. A Project Coordinating Unit (PCU)

is to be established within the MoFEP to undertake the day-to-day implementation of the project. The

PCU will be headed by the Project Coordinator (PC), who will also be the Secretary of the PSC. A

professional accountant and a procurement expert will be recruited to strengthen the PCU, which will

be responsible for procurement, financial management, monitoring and evaluation in accordance with

the Bank’s rules and regulations. The project will be implemented over a period of two years after

effectiveness, which is expected to commence in the first quarter, 2013.

4.1.2 Financial Management: The financial management capacity of the MoFEP was assessed in

October 2011. The assessment showed that subject to some prior actions being undertaken, the PFM

system in South Sudan could meet the Bank’s requirements for ensuring that the funds made available

for the financing of the PFAID will be used economically and efficiently for the intended purposes.

Some of the prior actions required are to i) establish a PCU; ii) ensure work-plans and yearly budgets

are prepared and strictly monitored on a quarterly basis in the course of implementing the PFAID; and

iii) include the PFAID in the Bank’s Internal Audit Work program, along with ensuring that the

Project is supervised on-site at least twice a year. At the entry level, the financial management risk is

rated as moderate, primarily because of skill-mix that will be recruited for the PCU. Further, a

financial management and project implementation course will be offered by the Bank to the staff of

the PCU and the MoFEP.

4.1.3 Procurement: The PCU will be responsible for the procurement of goods, consultancy

services and training as presented in Table 4.1 below. All procurement will be carried out in

accordance with the Bank’s Rules of Procedure for the Procurement of Goods, and the use of

consultants, using standard bidding documents. The PCU will prepare a Procurement Plan for an

initial period of at least 12 months. The Beneficiary shall update the Procurement Plan on an annual

basis or as needed covering the next 12 months period of project implementation. Any revisions

proposed to the Procurement Plan shall be provided to the Bank for its prior approval. Technical

Annex B5 provides details on procurement arrangement relating to goods, consulting services, and

training. Technical Annexes A3 and provides details of the challenges in South Sudan’s Public

Finance Management systems, while Technical Annex B3 provides the financial and procurement

arrangements that will apply in implementing the PFAID. As indicated in para 4.1.1, a procurement

expert will be hired to strengthen the PCU, assist in the procurement activities and provide training to

public sector staff on procurement.

16

Table 4.1: Procurement arrangements

717,04 - - - - 717,04

(717,04) (717,04)

289,82 - - - - 289,82

(289,82) (289,82)

- 2 306,93 - - - 2 306,93

(2 306,93) (2 306,93)

- 838,56 - - - 838,56

(838,56) (838,56)

- 201,45 - - - 201,45

(201,45) (201,45)

- - - - -

- - - 139,83 - 139,83

(139,83) (139,83)

- - 306,37 - - 306,37

(306,37) (306,37)

1 006,86 3 346,94 306,37 139,83 - 4 800,00

(1 006,86) (3 346,94) (306,37) (139,83) - (4 800,00)

Total

Procurement Method

National

Competitive

Bidding

Consulting

Services

Local

Shopping

Direct

Contracting N.B.F.

Audit

D. PERSONEL

E. OPERATING COSTS

Training

Technical Assistance

Studies

A. GOODS

Equipment

B. WORKS

C. SERVICES

4.1.4 Disbursement: The FSF grant is anticipated to be disbursed over a period of 24 months, from

January 2013 to December 2014. The project will use both the Special Account (SA) and the direct

payment methods of disbursement as prescribed in the Bank’s Disbursement Handbook. The

Government will operate one foreign currency denominated Special Account into which the proceeds

of the grant will be deposited and further to a local currency denominated special account. The

opening of a foreign and local currency denominated Special Accounts will be a condition precedent

to first disbursement of the grant. An initial deposit for an amount corresponding to 6 months of

activities as justified by a work program approved by the Bank will be made into the Special Account.

Subsequent replenishments of the account will be subject to the PCU having provided sufficient

justifications for the use of at least 50% of the previous advance and 100% of all older advances.

Disbursements with respect to contracts for equipment, supplies, auditing service and consultancy

services will be done using the direct payment method.

4.1.5 Audit: The accounts will be audited annually by an independent and reputable audit firm from

within the sub-region and audit reports will be submitted to the Bank not later than six months after

closure of the fiscal year.

4.2 Monitoring

4.2.1 MoFEP will be responsible for the overall monitoring and evaluation of activities in

collaboration with the Heads of beneficiary institutions and the Coordinator, PCU and the South

Sudan Field Office. The MOFEP through PCU shall be responsible for reporting on the progress made

in the implementation of the project and shall submit quarterly progress reports on all aspects of

project execution. The reports will cover aspects related to project implementation, including project

status, disbursements, work program, monitoring of performance indicators, analysis of slippages in

implementation, potential problems and proposed solutions. The report will also include an overview

of activities planned for the forthcoming quarter. Particular attention will be devoted to outputs as set

out in the project logical framework. The Bank will also monitor project implementation through

17

supervision missions and a mid-term review. A project completion report will be undertaken to

evaluate progress against outputs and outcomes and draw lessons for possible follow-up operation.

Table 4.1 presents the project implementation schedule.

Table 4.2: Project Implementation Schedule

4.3 Governance

4.3.1 As mentioned earlier, the Bank has been inactive in Sudan since 2005 due to the prolonged

conflict and arrears-induced sanctions. However, since the signing of the CPA, the MoFEP, which is

the implementing agency of the PFAID, has substantially invested in developing good governance

structures and financial management policies and procedures that enhance transparency and

accountability in its financial operations. The proposed PFAID will contribute to further strengthening

financial management policies and procedures in the MoFEP.

4.4 Sustainability

4.4.1 The project has several potential factors which will contribute to the sustainability of its

envisaged outcomes. The first is the government’s strong commitment to policy and institutional

reforms for improving transparency and accountability in the PFM. This commitment is reflected in

the enactment of the PFM bill. This commitment of the government to capacity building, especially in

key areas such as PFM will contribute immensely to the successful implementation of the PFAID and

its sustainability. In addition, the government will ensure that technical assistance personnel engaged

by the project transfer skills to national counterparts. Each technical assistance personnel will have at

least three (3) counterparts from the beneficiary institution. The various reforms and intiatives being

undertaken by the GRSS including enactnment of the PFM Bill will also contribute towards the

sustainability of the project.

4.4.2 The second factor for guaranteeing sustainability is the focus of the project on national

capacity building through human resources development within South Sudan. Sustainability of the

outcomes is ensured mostly through design of tailor -made short-term (one to two weeks) courses. Use

of the national training institutions (Institute of Public Administration and Management) will also

strengthen the training institutions themselves.

4.5 Risk Management

Risk # 1: Although there seems to be a semblance of peace in the immediate post-independence

era, there is the possibility of either internal or external conflict, due to the unresolved post -

independence issues, including the sharing of oil revenue. The government is making every effort

to mitigate internal conflict through a combination of measures, including and partnering with the

Task Responsible

Party

Start Date

Preparation/Appraisal OSFU/OREB June/July 2011

Grant Approval ADF November 2012

Grant Effectiveness ADF/GRSS December 2012/January 2013

Procurement of goods and services GRSS January 2013 – September 2014

Commencement of Training programs GRSS January 2013 – October 2014

Deployment of Technical Assistances (TA) GRSS January 2013 – October 2014

Submission of Annual Audit Report GRSS December 2013, 2014

Supervision Mission ADF June 2013 and September 2014.

Mid-term Review ADF December 2013

Project Completion Report ADF/GRSS February 2015

18

international community, the African Union High Level Implemention Panel (AUHIP) and the the

United Nations in negotiating and resolving post-–independence issues. The government has also

prepared a comprehensive National Development Program (NDP) as the vehicle for delivering the

peace dividend in the form of broad based and inclusive growth. The proposed project will

contribute to implementing the NDP through strengthened PFM, thus reviving service delivery

and addressing the abject poverty in the country.

Risks # 2: Weak procurement and implementation capacity in the public sector will be

mitigated by implementing the operation through the PCU. Further, the ongoing Bank supported

Institutional Support Project, support from various donors, and the proposed capacity building

project will help strengthen capacity, especially for PFM.

Risk # 3: Mismanagement of resources could derail the implementation of the operation or lead

to shortfall in donor funding for PFM reforms. Government ownership and support for ongoing

PFM reforms, and the desire to create the enabling environment for economic growth and poverty

reduction will mitigate this risk.

4.6 Knowledge Building

4.6.1 The PFAID will help build knowledge and develop skills in specific areas relating to PFM in

fragile and post-conflict settings. The knowledge in PFM would be acquired through technical

assistance and training in a range of areas, including financial accounting and auditing; specialized

audit; budgeting and financial reporting; records management; fraud investigation and prevention,

corruption diagnostic studies and business management. Knowledge in PFM will also be acquired

through on-the-job skills transfer using seasoned experts.

V. LEGAL INSTRUMENTS AND AUTHORITY

5.1 Legal instrument

5.1.1 The Grant Protocol of Agreement between the Republic of South Sudan and the African

Development Bank for an amount of ADF Grant of UA 4.8 million from the Pillar III of the Fragile

State Facility.

5.2 Conditions associated with Bank’s intervention

5.2.1 The ADF Grant Protocol of Agreement shall enter into force on the date of signature by the

Government of the Republic of South Sudan (GRSS) and the African Development Bank Group. The

first disbursement of the grant shall be subject to effectiveness of the Grant Protocol of Agreement

and fulfillment by the Guarantee, to the satisfaction of the Bank of the following specific conditions:

(i) A letter from the MoFEP providing evidence for having opened a foreign currency denominated

account at a bank acceptable to the Fund to receiving the proceeds of the Grant;

(ii) A letter from MoFEP transmitting the membership of the Project Steering Committee (PSC)

comprising representatives of the beneficiary institution namely the Office of the Auditor General and

the selected Departments in the MoFEP, and headed by the Under-Secretary, MoFEP;

(iii) A letter from the MoFEP providing evidence for the establishment of the Project Coordination Unit

(PCU) made up of a Project Coordinator (PC), a Project Accountant, Procurement Expert, and a Secretary.

The PC is expected to serve as the Secretary to the PSC.

19

5.3 Compliance with Bank Policies

5.3.1 This project complies with all applicable Bank policies.

VI. RECOMMENDATION

6.1 Management recommends that the Board of Directors approve the proposed Grant of UA 4.80

million to the Government of South Sudan from the FSF-Pillar III for the purposes of this operation

and subject to the conditions stipulated in this report.

Annex 1: Map of South Sudan

Annex 2: South Sudan - Comparative Social Indicators

POPULATION SOUTH

SUDAN

SUB-

SAHARAN

AFRICA

POPULATION

Total Population 8, 260,000 1, 031, 000,000

Male Population 4, 290,000 520, 655,000

Female Population 3, 970 ,000 510, 000, 000

Total Area (sq. Km) 644, 329 30, 221, 532

Population Density (people per sq.km) 13 3.4

Poverty and Inequality

Incidence of Poverty (% of population) 50.6 57

Inequality (Gini coefficient) 45.5 0.6

Water Health and Sanitation

Proportion of population with access to improved sources of drinking

water 55 64.9

Proportion of population with access to a toilet facility 20 20 40.8

Under-five morality rate per 1,000 live births 135 30.1

Infant mortality per 1,000live births 102 78

Maternal mortality rate per 100,000live births 2054 530.2

Immunization of children (% of population) 20 83.7

Births attended by skilled health staff (%of total) 10 52.7

Prevalence of undernourishment ( %of population ) 47 -

Malnutrition prevalence, weight for age (%of children under 5) 48

Education

Literacy rate (% of people ages 15-24) 40 72

Literacy rate (% of people ages 15-24 - male) 55 -

Literacy rate (% of people ages 15-24 - female) 28 -

Literacy rate (15 years above) 27 64.8

Literacy rate (15 years above-male) 40 55.9

Literacy rate (15 years above- female) 16 74.0

Gross enrolment rate (primary) 72 102.5

Net enrolment rate (primary) 48 77.9

Ratio of female to male primary enrolment (%) 70 88.6

ANNEX 3: MAIN AREAS OF DONOR INTERVENTIONS

ACTIVITIES MDTF CBTF USAID WB/ LICUS

IMF UNDP DFID Norway BENEFICIARIES

Oil revenue Policy/ Management

X X Joint Oil Committee/ Budget Core Team

Public

financial management

X X X X Taxation

Department Undersecretaries Central Bank of

Budget preparation

X X X Budget Core Team

Procedures for

public expenditure

X Budget Core Team

Pay-roll and

payment

system

X Treasury

Department

Procurement X Undersecretaries

Audit X Undersecretaries/A

ccounts Department Management

Strategies X X Undersecretaries

Governance X Core Budget Team The IMF is developing a fiscal framework, and assisting in the establishment of the Central Bank and its core

activities, building statistical capacity and putting in place the legislative framework required for effective

economic and financial management.

Annex 4: Bank Group Operations in Sudan and South Sudan

Project/Activity Amount Window or

Source of

Financing

Status

Institutional Capacity Building Programme

for Poverty Reduction and Good

Governance (ICBPPRGG). Eighty percent

of project activities are concentrated in

South Sudan. Fifty one percent of the

resources have been disbursed

UA9 million ADF grant Ongoing. Expected to be

completed by December

2012.

Support to the preparation of the South

Integrated Fiduciary Assessment (SSIFA).

The Bank has provided USD72,000 to

finance the cost of preparing the SSIFA

USD72,000 Admin Budget The SSIFA has been

finalized

Assistance to the University of Juba to train

civil servants in public finance management

USD482,350 Governance

Trust Fund

Letter of Agreement is

being signed

Support to the African Union High Level

Implementation Panel (AUHIP)-The Bank

has provided consultants to enhance the

capacity of the AUHIP in advising on post-

referendum issues such as debt, oil,

currency and general economic framework

USD372,141 Enhanced

Strategic and

Technical

Engagement in

Sudan

Ongoing

Support to the preparation of the National

Development Plan-This includes provision

of inputs into drafting and finalization of the

SSDP and active participation in the

conferences and consultations; advising on

the identification and design and

implementation of high priority

programmes and projects; and developing

an action plan form infrastructure

development for the decade ahead using

data and information from assessments.

Technical inputs and

mission costs

Administrative

Budget

The Plan has been

finalized

Assessments in agriculture and

infrastructure sectors

USD321,000 Enhanced

Strategic and

Technical

Engagement in

Sudan

Assessments have been

completed. and a

validation workshop was

held in September 2011

to An infrastructure

action plan is now being

prepared

Website for partnership and for capacity

building

Technical

Inputs

The website has been

established and launched.

A series of analytical studies are being

undertaken including Poverty Situation and

Prospects in South Sudan: Investing in

Education and Non-Oil Activities, political

economy analysis, poverty and inequality

analysis, cross border trade and regional

integration.

USD312,000 Enhanced

Strategic and

Technical

Engagement in

Sudan

Ongoing